In electricity distribution operations, utilities perform long term and short term demand forecasting to plan adequately for power generation needs, which includes supply side solutions and demand responses. More often than not, to meet the short term demand, utilities go for spot or short term energy purchases from traditional large energy suppliers and smaller suppliers. Most of the time these spot purchases end up floating an energy procurement contract for the shortage amount of power required to meet the demand requirement. Contracts for the energy blocks that are provided in the market do not take into account the fact that the price for the block might be lower if the blocks are subdivided into smaller blocks. This can be true because each supplier operates at a different level of efficiency and thus has a different risk appetite.
There currently is no solution available to determine: which suppliers can best fill which type of need; what is the price elasticity with the given suppliers in the market; whether breaking the contract into smaller parts changes price elasticity or results in a better mix of suppliers to provision the increased demand; or whether filling a spot need by subdividing reduces risks associated with the dependence of large value contracts.